Big Tax Slab Changes for FY 2025-26 You Must Know

The financial year 2025-26 has introduced crucial changes to India's income tax return system, aimed at simplifying tax compliance and providing relief to the middle-class segment. With newly structured tax slabs, increased standard deduction, and a broader rebate limit, taxpayers must evaluate how these changes impact their financial planning and tax liability. Whether you are salaried or self-employed, understanding these changes can help you make smarter tax-saving decisions. If you're seeking assistance with Income Tax Return Filing in Ghaziabad, our expert consultants are here to guide you.

New Income Tax Slabs (FY 2025-26):

Annual Income

Tax Rate

Up to ₹4,00,000

Nil

₹4,00,001 – ₹8,00,000

5%

₹8,00,001 – ₹12,00,000

10%

₹12,00,001 – ₹16,00,000

15%

₹16,00,001 – ₹20,00,000

20%

₹20,00,001 – ₹24,00,000

25%

Above ₹24,00,000

30%

This new progressive slab system is aimed at offering relief to taxpayers across all income levels while simplifying the tax regime.

Major Income Tax Updates:

  • Standard Deduction Increased: The standard deduction under the new tax regime has been increased from ₹50,000 to ₹75,000, providing additional savings for salaried individuals.

  • Section 87A Rebate Enhanced: Taxpayers with a total income of up to ₹12 lakh can now claim a full tax rebate, making them liable to pay zero tax under the new regime.

  • Ease for Pensioners: Pension income also qualifies for the standard deduction, giving retired individuals better post-retirement financial support.

Impact on Taxpayers: This budget reflects a pro-middle class stance, especially benefiting those who do not claim multiple exemptions. The increased rebate threshold helps reduce tax returns liability significantly, and higher deductions are aimed at putting more disposable income into citizens' hands.

FAQs: Q1. Who should switch to the new tax regime? 

A: If you don’t claim significant deductions (like home loan interest or 80C investments), the new regime with lower rates may be more beneficial.

Q2. Can I still claim HRA and 80C under the new regime? 

A: No, the new regime excludes most deductions and exemptions, including HRA, 80C, and 80D.

Q3. Is the rebate under Section 87A automatic? 

A: Yes, if your total income is under ₹12 lakh, the rebate will be calculated automatically when you file your return.

Conclusion: 

The new income tax filing rules for FY 2025-26 are designed to provide simplicity and affordability. Taxpayers should compare both regimes based on their incomes and deductions before choosing. For tailored tax planning and itr filing, consult our CA for GST & ITR Filing in Ghaziabad & Delhi.

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